11 April 2018

Making the UK flower industry bloom again

By pruning back the supply chain, several young businesses think they can get better quality stems.

Spiralling prices, truculent traders and the occasional aggressive stand-off. Every morning, hundreds of dealmakers – mostly men – gather at Aalsmeer flower market in Holland to bid on stems. Each day, up to 50,000 transactions take place.

This is the world’s largest cut flower market – more reminiscent of a cut-throat financial trading floor than any high-street florist. Each day over 17 million stems are sold, and the deals struck – good and bad – impact the entire horticultural supply chain. Dutch markets supply more than 60% of the world’s £75bn cut flower industry, and 90% of the stems sold in the UK.

Growing pains

It’s not always been this way. Forty years ago, New Covent Garden, the UK’s best-known wholesale flower market, stocked mostly British blooms. But as oil prices skyrocketed in the 1970s, UK farmers couldn’t keep up with the cost of heating greenhouses and many went out of business. There were 120 chrysanthemum farmers in 1970; by 2013 there were just three.

Today, running costs have eased up, but the price of land prohibits new entrants from building large-scale farms from scratch.

But despite falling behind, UK flower farms are slowly starting to claw back market share; from just 10% of flowers sold at New Covent Garden Market in 2013, today around 12% are British-grown blooms. This year, Flowers from the Farm, a network of small British flower farmers, will exhibit at the prestigious Chelsea Flower Show for the first time.

It’ll be Chelsea’s last show before Brexit; after which the cost of importing cut flowers is expected to increase by up to 1.3% (adding an extra £2bn a year in total). While most small businesses bemoan Brexit, flower farms across the UK may in fact benefit from a break with the EU.

Nation of gardeners

Caroline Beck is one of these modern UK flower farmers. She grows over 100 varieties of flowers and foliage from an acre of land in Durham. She supplies events and local florists, and also runs ‘pick your own’ days at the farm.

Like with food and drink, increased consumer interest around product provenance is trickling through to flowers. Beck says more brides prefer the wild aesthetic of British gardens for their big day over traditional arrangements of pink rose and eucalyptus.

Horticultural hubs

Scaling up, however, is a struggle with transport and volumes a key concern, Beck says. In Kenya and Ethiopia, farmers have built networks, such as the Ethiopian Horticulture Producer Exporters Association, so they can sell to wholesalers in bulk. Royal Flora Holland, which runs Aalsmeer and other Dutch auctions, is a cooperative of growers with more than 4,000 members. But a more formalised network connecting flower farmers at scale (like those that represent dairy and grain farmers) is absent in the UK.

‘When I came into this I thought growing flowers was the main challenge,’ Beck says. ‘It’s not. It’s getting people to realise they can get them from me [rather than abroad].’

Several ‘hubs’ are already emerging. The Flower Union, founded in 2012, pools transportation and admin resources for small growers. East Riding in Yorkshire and Cornwall have their own hubs, too.

‘We need [a transport hub] in the north of England, a couple in Scotland, probably around 10 all over the country,’ Beck says. ‘That would make a really big difference.’

Vintage supply

The ones with the power to get British flowers into customers hands are the florists. In the past five years, a raft of tech-powered flower businesses have launched. Each promises to bring customers superior blooms, bigger bouquets and better prices. They’re doing this by circumventing the traditional flower supply chain.

Since the 1970s, getting flowers from farm to vase has gone something like this: after the auctions in Holland, flowers are shipped to the likes of New Covent Garden and Birmingham Wholesale markets. Suppliers, wholesalers, shippers and importers all take a cut on the way. At the crack of dawn, florists, event planners and visual merchandisers arrive to haggle for the best prices, trying to figure out how to work the daily fluctuations into their pricing. By the time flowers are placed on restaurant or kitchen tables, they’ve got about a week left in them. Then, it’s in the bin.

Peonies by post

Bloom and Wild, founded in 2013, was one of the first to bring letterbox-sized parcels of fresh flowers to consumers. In 2014, Freddie’s Flowers was launched with a similar flowers-by-post proposition. Flowerbx came next, launching in 2015 with its elegant, single-colour bouquets.

They work directly with the UK’s few remaining established flower farms – such as Smith and Munson and Lamb’s Flowers, both founded in the 1980s – and have built relationships with farmers abroad to keep their operations running year-round. Auction houses and wholesalers barely feature in their business plans.

With no high-street presence, no warehouses and no need to hold stock, these e-commerce operations are much cheaper to run than a traditional high-street florist.

‘Instead of using the auction I meet the growers and organise directly with them,’ says Freddie Garland, founder of Freddie’s Flowers. ‘There’s a cost advantage that means we end up putting more in a box.’

This method also significantly cuts down the number of stems that end up being over-handled, enabling the e-florists to squeeze even more pennies out of each flower.

‘There are two forms of waste,’ Aron Gelbard, founder of Bloom and Wild, points out. ‘There’s grading out [quality control checks done by florists] and then there’s misforcasting. The more steps you have, the more people waste [stock] at each step.’

Flowers that last forever

In a marketing strategy that’s more similar to direct-to-consumer fashion brand Everlane’s, these florists are making a clear point of communicating the lack of intricacies in their supply chain to customers. And the reason customers should care, they say, is because it means their blooms are not only better value than a high-street florist, but they’ll last longer too.

Freddie’s says it can pick, pack and send out orders within 48 hours, while Netherlands-based competitor Bloomon has cut lead times down to 36 hours. In contrast to the extra days flowers take to get to high-street florists, via the markets and auctions, it’s a big improvement.

Gold and green

Somewhat unusually for floristry businesses, their tactics have caught the attention of venture capitalists. In February 2017, Bloomon raised £16m. Two months later, Flowerbx received a £1.5m funding injection. Meanwhile, Bloom and Wild has raised over £7m in funding.

These brands all promise a way to tap into a potentially lucrative market: demand for cut flowers is on the up. In 1998, Brits bought around £112m-worth of imported flowers. By 2014, that figure had increased six-fold, to £691m. If these small businesses can live up to their promises of better value and quality compared to incumbents like flower delivery firm Interflora, a significant chunk of that could be theirs for the taking.

But there are still issues around supply and demand in these new logistics networks. The conflict between how soon customers want bouquets and how quickly the farms can pick and pack them is difficult to resolve.

Bloom and Wild allows customers to order up to 5:30pm for next day delivery – but stems need to be cut up to four days before.

To solve this, Bloom and Wild’s website reacts intelligently to order numbers. If roses, for example, aren’t moving as quickly as forecast, those bouquets will be pushed to a more prominent position on the home page.

Garland says he tells his growers with ‘98% accuracy’ what he needs. The margin of error can always be covered by a trip to the wholesale markets. Several wholesalers at New Covent Garden told Courier that the likes of Freddie’s are semi-regular customers.

Not on the high street

While the postbox flower startups continue to fine-tune their relationships with flower farmers, another contender has been quietly creating partnerships with high street florists and wholesalers at New Covent Garden.

Floom is a platform that allows florists to sell their bouquets online – not dissimilar to craft marketplace Etsy. Founder Lana Elie thinks this is the best way to develop the flower industry.

Florists, busy running between wholesale markets and client appointments, often struggle to promote footfall to high-street stores, let alone build an e-commerce channel as powerful as Interflora. Using Floom, florists can keep track of how many stems they have in stock, specify their delivery lead times and upload quality photos of their arrangements. Floom takes a 20% cut of sales.

‘You’re asking someone who’s more creative than anything to understand something quite daunting,’ Elie says. ‘But that’s what my business is. I’m not [the one] waking up at 5am every morning to go to the flower markets.’

While high-street florists and wholesalers are adapting, embracing platforms like Floom to reach customers, it’s unlikely that Aalsmeer will fade to insignificance.

In 2016, Flora Holland reported that auction sales were down 0.3%, but profits overall were up by 4%, at £4bn. Traders will continue to fight over the prices of cut flowers for a long while yet.